Insurance heavyweight
Allianz has signed an agreement with Sri Lankan group Janashakthi Insurance PLC to acquire its general insurance subsidiary.
The deal, which will see Allianz buy 100% of Janashakthi General Insurance Ltd for LKR16.4 billion (US$106.9 million), is subject to regulatory approval and is expected to complete in the first quarter of 2018.
If the acquisition pushes through, it will make Allianz’s Sri Lankan operation one of the country’s largest general insurers, with a market share of around 20%. According to Allianz, the deal will strengthen Allianz Lanka’s customer reach and service capabilities; while Janashakthi’s general insurance portfolio complements Allianz Lanka’s existing business and represents a strategic fit across both corporate and retail lines.
The insurance giant added that an investment of this magnitude demonstrates its confidence in the Sri Lankan general insurance market, which had a compound annual growth rate of 12.1% between 2010 and 2016. This is expected to increase to 12.5% by 2020, due to improving trade and macroeconomic conditions, as well as increased insurance penetration.
George Sartorel, Allianz’s regional CEO for Asia-Pacific, said that the transaction is a “highly attractive” opportunity to boost its market presence in the country and its growth agenda in the region.
After the acquisition, Janashakthi Insurance PLC will concentrate on its life insurance business and the continued development of Sri Lanka’s life insurance sector.
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